PGT Innovations' Jeff Jackson details what he looks for to get to the if and when of a recession.
PGT Innovations President and CEO Jeff Jackson has several indicators when he considers where the economy is headed, recession or otherwise, and its impact on the Venice-based impact resistant windows and doors manufacturer. The company has approximately 5,500 employees spread across its 12 locations. That includes some 2,200 in Sarasota County, where Publix is the only non-government entity with more employees.
Jackson has had a long career in business and finance. He joined PGT in 2005, and helped lead the company’s IPO in 2006. Prior to that he held executive finance positions at The Hershey Co., Mrs. Smith’s Bakeries and KPMG. Six of Jackson's recession indicators for PGT include:
- Equity markets: The first six months of this year, he says, were some of the worst in a long time in how much the stock markets fell. Equity markets, he says, are a big indicator for how well the repair and remodeling sector will fare. “Folks feel better if equity, 401K and investments are doing good,” he says. “Then they’re going to replace their sliding glass doors, (add) a pool or add an addition to their house.”
- Unemployment: Keeping an eye on unemployment levels is one of the biggest indicators Jackson looks to in terms of whether the country has entered a recession. As of now, he says no because the unemployment rate is 3.5%. Once companies stop hiring and start laying off, the country may have an issue. PGT is one many companies in hiring mode. In doing so, it's responding to major shifts in the labor market — namely, pay. “We’ve increased our wages dramatically over the last couple of years,” Jackson says. “The biggest asset we have is our employees. Tenured employees mean so much both to the culture of the company as well as quality of the product.”
- Trucking: When looking at the trucking industry for an economic slowdown indicator, Jackson says PGT remains “slammed” on trucking. “The trucking industry is still in hot demand,” he says. “That means goods are still moving across the U.S.”
- Housing inventory: Jackson says the housing inventory right now is in good shape, especially when you take in the factor that population growth is continuing. "I think the supply and demand dynamics in terms of the housing industry is still very positive," he says. He'll also continue to compare the number of housing starts to the housing inventory over the next several months, for any signs of a looming recession.
- International shipping: When consumers in the U.S. stop spending money, the number of imports from overseas will die down. While he looks at both imports and exports, Jackson says he's mainly focused how much the country imports.
- Auto industry: “You could argue certain industries are in a recession,” he says. “The auto industry may already be in a recession. They’ve had negative growth for a couple of months, but the auto industry alone can’t take the country into recession.”
For Jackson, the good news internally is the manufacturing industry is still doing well.
“I think manufacturing is, I won’t say immune to a recession because we’re not, but people have to have homes,” he says. “Could it go into a recession? Most definitely. And historically, it always has when the Fed (raises interest rates)."
“We’re not there yet, but it’s probably going to come because it has in the past. I think manufacturing and housing will be somewhat immune to it. We’ve gotten through it before.”